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tv   Squawk Alley  CNBC  June 8, 2016 11:00am-12:01pm EDT

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through finance and philanthropy. carl icahn talking about the cutting edge on "squawk box" tomorrow on cnbc. good morning, 8:00 a.m. in amazon headquarters, and it is 11:00 on "squawk alley" and we are live. ♪ ♪ i will tell you a story are about the joker and the thief in the night ♪ good morning. i'm carl quintanilla, and jon fortt is off today and kayla
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tausche is with us as well as mark santoli. and big news with prime minister modi about to address a joint session of congress. and our own seema mody is with us. >> paul ryan is introducing everybody in attendance, and we have not seen the prime minister take the stage yet, but we will bring you the highlights, and once they come. it is going to be prime minister making the case of why the companies in the u.s. should do business in india, and india is a better place to do business than other emerging markets. this is a momentous time for the country, because it is currently the fastest growing momentous market in the world, but it is not the biggest, and china is. and india knows and prime m minister modi knows that in order to reach the target, it needs the help of u.s. corporations as discussed at the
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u.s.-india council event. jeff bezos of amazon and the ceo of cisco as well expressing interest. >> john harwood joining us on set. it is fascinating to watch the political world catch up with what the tech world has been preaching for a long time, and that is -- >> no question. president obama has been trying to reorient american foreign policy toward asia and this is the counter balance to china, and seema talked about the increasing trade to india, and the two leaders talking about the acceleration of plans for six nuclear plants to be built by westinghouse in india. now they have, they did not talk about specifically the south china sea which is a security concern that the united states has had with china and the president discussed it in the recent trip to veietnam when he talked about selling military equipment to vietnam, but the
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two leaders didding a e gree that india is going to move forward with the joining the paris climate agreement which is a huge priority of the president, and carbon reduction, and all of this is consistent with the relation that the president is nurturing to achieve various of the goals. >> and i would say, carl, the timing of modi's arrival in washington is key, because so many key political strategists have been talking about it. it is the seventh meet iing of prime minister modi and president obama at the white house, and as john mentioned they have been inkrecreasingly bilateral ties with u.s. and india and mentioned the use of exercising navigational freedom which indirectly mentions the south china sea, and we know over the last two weeks, the relationship of the u.s., and china has deteriorated a little bit, because the two economic powers have fail ed to see eye o
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eye on how to find a resolution around the south china sea, and the tribunal key allowing the partnership to maintain a certain level of presence, and influence of asia on the china side. >> and it is interesting the unique timing of all of this are from that perspective, and the way that the companies are showing all of the excitement about india is also are interesting from the perspective of where it sits among the emerging markets, and the brics construct has been somewhat of india on a different timetable and different drivers. it is not commodity-based and it did not have the same kind of boon from that dynamic, and now because it is a little bit more, i geuess, attuned to what is going on in the tech economy, it is seeming like it is the right place at the right time. >> well said. let's bring in farhad, and i
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would love to have your perspective on the sector coverage in india, and i know you are interested in the t but we have talked about the growth industrials of the country, and where does tech fit in? >> it is sort of becoming ingin bigger part. i think that the tech people see it as a huge potential market, but i have been hearing about this for at least five or maybe longer years. so it is a huge potential market for a long time, and there have been various stumbling blocks along the way, and apple has had numb numerous problems to sell there not only because of the price, but distribution, and difficulty setting up the store, and amazon has tough competition from the domestic company, and so, you know, they have seep it as a big place to sell. but it, you know, it has not, and the growth has come, but it has not sort of satisfied the wildest dreams the way that i think that they have seen more success in china and things have
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been much easier in china, and india has bneen a tougher marke to crack. >> it is hard to have that being true, but you could argue that. and the timing of modi's visit, and bezos' comments at code, and coincidence or is this coming to a boil? >> well, various things came together, and it is not all planned this way, but i think that it does indicate kind of this much bigger interest among the tech companies to go after markets in india, because, you know, for one thing for apple, for example, they are having trouble in china, and so india is seen as kind of the, you could say like the backstop, the other option, and it is something that they have tried to do for a while. amazon sees it as i think like a real thing. it is not sort of the public relations thing, and they are putting money there, and they also seem competition from other
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companies that could actually threaten their possible dominance tlx and they like to be the far and away leader, and that might not happen in india. >> and farhad, you mention ed that they see india as a real opportunity, but what about this big investment announced $5 billion up from $3 billion from amazon web services to build a big facility there, and then of course some engineering and the software development. is it also about amazon attempting to kind of do the core consumer business and export that in a big way over there as well? >> yeah. i mean, web services is an increasingly big part of amazon generally, so it may at some point become the core business, and retail is more difficult. retail requires physical infrastructure, and it is unclear if the kinds of things that amazon needs in the market, and the kind of the roads and other things like, you know, are there yet to the degree that
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amazon wants the kind of the n consumer base of buying things online. it is a small part of india's market, and it is growing. but you know, it is very good and very nimble competitors to flip car and snap deal. they and amazon sees the success, and they want to be far and ahead of them. >> kayla. >> well, farhad, i am wondering how much you think that the companies amazon included are taking the lessons they learned in china about, the lack of the sort of concentration in the retail market, and how it depends so much on the rural economy and the small towns and village villages and taking the lessons that they learned in china and applying them to the operations in india to try to do things a little bit differently, especially as the country is on the cusp of really becoming a commercial center, at least from
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the ecommerce perspective, because it was 60 billion in the u.s., and last year 341 billion, and so are the companies learning the lessons and doing it better in india in time around? >> certain areally, the experience in china helps, but i think that they are cautious to see the places as almost kind of the kcompletely different both in, you know, cultures and the infrastructure part of it, and where they are in sort of the development of the internet generally, and how important the internet is in parts of people's lives, so i am not sure that there is much overlap, and one thing that you could say that is similar is one of the things that you have to do in both places is to deal with various kinds of unusual government regulations. this is something that apple has had to do, and it is difficult for them to open up stores in india now, because the indian government has locally sourced
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iphones which apple cannot do, and amazon has similar things to deal with based on on the fact that they have to get the foreign and the indian investors to come on board with them to satisfy the regulations. so in that respect, they have to kind of go through a lot of red tape in both places, but i am not sure that in other ways, there is a lot of overlap in the lessons carryover from one place to another. >> interesting. on that note, bezos did make comment last night as he was there to accept an award, and let's take a listen to that. >> and the lives of millions of indians are being transformed by the adoption of technology and the use of ecommerce. we see the business as closely integrated and contributing to the success of prime minister modi's proare grams -- programs, skill india, make it india, and
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others that support the growth. >> and seema, on that, i wonder how much of modi's address is to be aimed at congress, and those who are influencing trade or ceos and entrepreneurs directly? >> well, probably a little bit of both. the need for strengthening bilateral trade, and the u.s. government support. but at the same time, really trying to showcase the reason why u.s. corporations should continue to invest more in the country. i mean, as we said, the demographics are very appealing, and this is what is going to make the india growth story so interesting. the democracy of the growth of people over age 25, but there is still a number of ongoing challenges including bureaucracy and corruption. and so at some level, talk is cheap, and you may be selling the dream, and we have to see the action, and he has been prime minister since may of
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2014, and about two years roughly a wrend seen some incremental change in the -- and we have seen the incremental change in the economic data, but still, some big corporations say this is a big concern of doing business in the country. when i was in bay zing, some of the foreign officers who had their offices there, they said that is why they are allocating the capital in china and not india, because they are waiting for regulatory channels to be changed before they can be more optimistic to doing business there in india. >> and once more, carl, it is a tremendous releaf to republicans in congress, and house speaker paul ryan after days of being under fire for donald trump and to be hosting a foreign leader and have a statesman-like event in the white house, and not being chased around by reporters
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asked about ddynamic or just a coincidence that he is there? >> oh, it is a coincidence that it is happening now, but it is, you know, there are various time times when you are a leader in congress when you feel like the world is chasing you down. and there are other times when you can get out from under that, and this is a moment to get out from under it, and the host the foreign leader and talk about the importance of the economic ties and trade, and india ist not part of the trans-pacific partnersh partnership, but it is a priority of paul ryan's, and even though donald trump wrapped it again last night, and they are e well coming the moment as president obama is, because again, president obama, and you are at the tail end of the term, and you can't get a lot done with congress, but you can make some headway on foreign policy, and you can try to reorient towards asia which has been his goal. he has a very good relationship with modi that has been developing. this is modi's second visit to washington, and seventh visit as
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seema mentioned, and this is one thing that is a time of tremendous division in the country that both of those can unite on. >> and you bring up the e election, and you were very early in calling that you did not see a contested gop convention, and i wonder given the results last night how well the table is set for the general? is this really it? quickly? >> yes, this is it. i cannot imagine a scenario, and several have talked about a dupb trump scenario, and i do not expect that to happen. >> all right. here is the prime minister of india modi speaking in front of congress and of course, as he makes headlines, we will bring them to you. and of course, political and trade ramificationa and nice collision between politics which we don't cover as much and business where the results, the hopes are real and tangible whether it is at a netflix and apple or the g.e. or amazon, and so we will keep the headlines
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coming as they come in. some interesting theater here, john, in the next few minutes as he is received by congress. >> well, we are accustomed to seeing the pictures when the president of the united states comes in to deliver a it is the of the union, but this is extraordinary. we have seen it recently, and the pope came to washington, and we have seen it before the iran nuclear deal when president netanyahu came, and any time a leader addresses a joint session of congress, it is a moment of drama on the hill. >> and a foreign leader like prime minister modi, there is a ongoing debate here in washington as to whether modi will comment on whether those comment on the actual race or those comments from donald trump on india's outsourcing sector stealing jobs from america. >> we will be listening for that for sure. there's nancy pelosi and you can
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see mitch mcconnell there, and this is going on to be a little distraction from ins and out of the daily races as john said, but the headlines as they are coming in will be headed your way. when we come back, as the prime min ster is going to address congress, we le talk to one of the start-ups of the country, and dubbed the square of india is going to be with us. and the highlight from code last week, the new piece is going to be looking at the important parts of the interview to break it down. and the man behind the netflix cue, and the man with the recommendations tab on your netflix account going to be joining us, and we will talk about algos when we come back. olay luminous
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>> the cnbc disrupter revealed this week, easy tap as dubbed by some as square in india, and it is a giant in the country. and the focus as the prime minister begins to address congress today, and some of the comments about entrepreneurship and investment in that country, and some of which we got the news from amazon last night. bobby bows joining us now with the co-founder of easy tap, and bobby s ate pleasure to talk to you this morning. >> thanks for having me. >> and we mentioned that you are the square of india, and we tend to connekon compare companies fs who may not have heard of it. >> well, the x of india and the y of india is a misconception,
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and we have been talk about it before, that indian business is very, very different in terms of the operational point of view. we are bigger than what square does, and some context might help. india, there are, there is a huge explosion on the consumer and merchant side happening over the last two years, and what india is looking for, and 3% electronic penetration versus where when square launched in america, we were 70% electronic, and we were a select sector, and how do you sell to the small and medium retailers using the credit cards, and serving that underer isved market, but india is different, because they need massive financial transaction upbringing, so two things happening in india right now. the consumers are exploding in terms of the digital payments, and last year we opened up 200 million bank accounts, and 250 million issued in last two years, and mobile wallets from zero to 150 million, and so now, on the other side of things, consumers do business with the
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banks and the merchants and s h such. >> and they do business with the smartphones. >> correct. >> and our consumers were familiar, and almost everybody had a credit card and some sort of piece of plastic, but the indian economy has leapfrogged that. >> yeah. well, we have had a billion mobile users, but the indian economy has not taken advantage of it, but in the last two years, you are seeing a massive change, and now we will use the smartphones whether it with large companies like amazon or small businesses or the organizations that want to bring the banking and inclusion into the smartphone world, and that s is the way to connect the consumer side with the merchant side. so to answer the question, we don't need to solve a credit card problem, but enable the microbanks and the villages and the large enterprises to move from the paper to landline technology to electronic transactions, and that is what is happening, so we are horizontal, and we want to allow people to explode on the merchant side to work with the
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consumers and connect seemlessly across the structure. >> and so when you hear somebody like jeff bezos of amazon say we will put $3 billion more into india, and what is going through your head? something to help you or something that is seen as an american company trying to gain dominance in a new market? >> well, you know, what amazon has done in india very, very well, and i heard you guys talk talking about it in the past, and you have to comto india with a 10-year window. if you say, i will come in and replicate a u.s. model, and it is not because the core product is not strong, but it is how you scale it is country-specific. one thing that amazon has built diligently is one of the world's most complicated low jgistics system, and how to distribute a package are from a warehouse to a village. >> and there is flip carts and snap deal, and who wins? >> well sh, the company with th longest time horizon with the disciplined set of processes is going to win. the companies, and the others
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have seen hypergrowth, but hitting the variables of scale. amazon has taken a long approach, and jeff bezos being who he is has done it in a smart way, and companies like amazon that come in andane vest and grow the market are good for us, because at the end of the day, any company or market need s s handle the financial transaction in the end, and we handle that. >> and we have seen the splashy announcements in india, and then a lot of them marked down, so give us a quick comment about the mood in tech investing in india. >> i think that if you have a long horizon, india is a great place to be, and i have been in india for 11 years, and it requires a lot of patience. the market is exploding and all of the demographic data is absolutely correct. what you are also seeing is a hypergrowth in terms of the electronic and digital usage and the mobile application usage in the last 12 to 24 months which is the key. and this mobilephone story that
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was a problem, now you are seeing the hypergrowth happen. so the investors who come in with a very indian-specific business model with the patience will see the dividends, but if you expect it to happen in two to three years, it won't happen. >> and thank you, bobby, as we are trying to wrap ourselves around the nuances of the indian market. and now, when we come up, bleacher report continues to see massive growth with 60 million unique views, and the founder and ceo of that company will join us next. and taking a quick look at the markets in the green if only marginally, and the s&p is slowly approaching a record high. "squawk alley" returns in a moment. ♪ why can't you see the cult of person personality ♪
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bleacher report is one of the hottest sites for millennials and attracting visitors per month, and we are joined by the ceo and cofou-four dave finokio, and it away on the
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set. >> dave, thanks for joining us from bleacher report, and tell us what you are doing through game five of the nba finals and how you are prepping to make it big? >> well, bleacher report is the sole voice of sports in the united states in the last couple of years. i am focused on creating the best content and experiences for the younger fans using the mobile phones especially, and that is the real transition that we have gone through in the industry where the people are watching the sportscenter less and less and that demo, and using the mobile phone as the number one consumption device. so the plans are mostly revoling around mobile and creating content of the mobile moments of game three. >> and you are talking about the content and the shareable content and moment, and not so much journalism as the sports models, and so how are you thinking of yourselves -- journalists, website fun about
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sports or information? >> well, we have a full portfolio of content types, and m modern company need to do that in the digital mobile space. we have highlight content and treatments on top of them, an investigative journalism, and documentaries, and video f features and traditional text content, and we have a little bit of everything, and again, focused on the creating the best possible experience for sports fans, and specifically on mobile and on social channels. >> you have been around for nine years and part off that owned by turner, and what is the difference of being owned by one of the big traditional media compani companies, and do they make you better or hold you back? >> it has made us better. one of the biggest differences of sports and other content categories is is the value of the broadcast rights in the sports space is immense and part of the turner relationship, we have been able to get access to
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rig rights for the nba for major league baseball and march madness and other sporting events, and we can use the highlights and the footage that we would not have been able to use if we were an independent company, and just an initial sports brand of cnn, and so the turner relationship has opened up a lot of doors for us. >> and you will hear the people talking about esports pen tering -- entering the market in a long way, and do you say, hey, let's inaugurate a new sport? >> well, any time there is user demand, we'll look at it, so esports with a lot of traction, and we are starting to treat esports as the mainstream or moving to the mainstream component of how you cover sports in the united states. so it is not too different when
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u ufc came on to the scene in the mid- to late 2000s and so we are monitoring everything in the sports world and try to figure out the most compelling way to cover it for the millennial audience. >> dave, thank you for joining us here on cnbc, and good luck on the nba finals and a future war of the media companies out there. >> and thanks for having me. >> i think that lebron needs the luck more than he does. thank you, eric. >> and the markets are closing in the uk and across europe, and simon is here with the details. >> well, we have broken the two-day rally in the european markets, and slightly lower, but the real news is in the bond markets where we continue to see the yield on the 10-year, and the german ten-year benchmark, and actually went e low and then bounced back, and i will come on to that in a minute as to why that might be. and today is the day that the european central bank buys corporate bonds, and starts to buy, and it is a new phase of
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the qe in the ecb as part of the asset purchasing of 80 billion euros a month, and they are now going to try to buy some types of the corporate debt, and you seen a huge issuance in anticipation of it, and you are will see 50 billion euros just last month of companies raising debt in the anticipation that the ecb will buy ut or yields like it, and therefore increase the profit margins, and we believe they are likely to focus on the utilities or the french bonds, and simply because there is more of them. they will publish it every week and we will start next week with a list of what they hold there. is a problem if they don't get the volume they need they may lose credibility. on that point, extraordinary intervention from the chief economist deutsche bank that the criticism is that the ecb is losing credibility, and causing a growth of populist, and extremist policies around europe as it is affecting the inflation
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weighing against the litany of distortion distortions, and perversions, and -- don't forget, you can see that writ large on cnbc. and the criticism of draghi is getting louder and louder. >> and meanwhile in the uk, part of bouncing back of the sterling, because it is encouraging pharmaceuticals, and last night on television, the prime minister was debating the brexit vote, and the website for registration crashed as a res t result. and he is seeking a extension which is unprecedented to the day, and tweeting that people should still apply to the vote online. back to you. >> and getting closer er and closer. simon hobbs, thank you. when we come back, walt mossberg's interview with jeff
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bezos was clearly one of the highlig highlights of the code conference last week. >> and in the golden globe, it is is going to help us sell more shoes. >> when we come back, walt's top takeaways from the interview when "squawk alley" comes back.
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everybody. i'm sue herera, and this is the cnbc news update at this hour. maria sharapova has been suspended for two years by the international tennis federation for testing positive for a drug at the australian earlier in the year. she released a statement saying that she is going to be appealing that ruling. and egypt air passenger plane en route from cairo to beijing was forced to make an emergency landing in uzbekistan after what egyptian authorities said was a false bomb threat. and paris' premier museum the louvre has been reopened after being closed to move masterpieces above ground. the closure cost the louvre an estimated $1.7 million in unsold tickets. thousands are lining up in
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louisville to get tickets for the service memorial for muhammad ali, and the tickets will be distribute and former president bill clinton will deliver the eulogy, and valley jarrett will read a statement from president obama. you are up to date,and that is the news update this hour, and now, back downtown to squawk all alley. >> thank you, sue. before he met with india's prime minister, walt mossberg sat down with jeff bezos last year, and joining us is editor of the verge, walt mossberg. >> i am not at the level of the indian prime min easter, but thank you, carl. >> we know that you were working on getting this interview at code for years, and it sounds like to me that you feel it is worth the wait. >> i do. and you were there, and so you can tell me, but i think that our audience in the room and all of the people who were watching the livestream, and who have since watched it agreed that it
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is a really, really interesting look inside of the mind of one of our outstanding tech visionaries. you know, i am not saying that i always agree with him, and i'm not saying that he does not make mistakes, but he is a really smart guy who is impacting all of us. >> and you are writing about a few elements of the chat. knowing when to call failure, a/i, and video as flywheel, spa space, and rank them for us. >> well, i trued to rank them in the column, but i thought that actually in a fun way, he said important things about a/i, and a/i as you know is a big theme at the conference and we had other speakers including elon musk and others talking about it, so a/i was a huge thing, but i was interested in his
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explanation of how he sees amazon working, and how he works. he said, you know, i try to be stubborn on the vision, and flexible on the details. if we want to have an idea and try it, we don't give it up to the so-called high achieving judgment champion gives up on it. so, you know, it could be down to one person that he respects, and they will keep going until that person p pull pulls their >> kayla, go ahead. >> with so many seemingly disparate businesses, it is hard to see the synergy of it all, and he tried to draw the connection of content and selling shoes, and when you see the collection of businesses that amazon has assembled more synergy than we traditionally think about? >> well, i didn't think so, but
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he described it all as one giant flywheel. he said that every time we win a golden globe for one of our originally produced tv series that they show on amazon prime, it sells more shoes, and he claimed that it iselles more shoes ra rather than directly is the phrase and he explained that it helps to build up people's interest in belonging to prime, and people who belong the prime because they are paying an annual fee feel like they want to get their money's worth so they browse more and buy more and he says it is a big flywheel, and he really wants to keep selling shoes, and that he is not a -- and he does not think of himself as a media company. >> and walt, do you think that bezos considers the market, itself, one of the high judgment arbiter arbiters of whether he should keep doing what he is doing, or maybe change the course a little bit, because he must recognize that he has been given an amazing amount of latitude, and
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earned it with how the market is able to kind of overlook the near-term profit pressures and everything else, and does he really see himself as i guess having to answer to the market ultimately? >> well, i first of all, we didn't get into that, and i need to make that clear. so i don't have any fresh statements from him from the conference about his views on the market, but he strikes me as a guy who understands that he owes it to the investors to do a good job, but he is playing a long game, and he reminds me of steve jobs in that respect. so it is not a every 90 days, what is the stock price, and that is a big main goal for me, and i don't see that as being bezos. you nknow, he is talking about space exploration that will take many, and he is laying the infrastructure for the future so he can move the heavy industry
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off of the earth and into the orbit, and this is not a short-term push for your stock, i don't think. >> no. i the think that the jobs' analogy was made all last week, and i think that it was bill gurley on the set who said that even the highest flying d.c. is amazed how he has remained entrepreneurial at scale. >> yeah. >> and it is going to be interesting to see if it ever breaks. >> yes, i agree with you. that is the way i kind of wrapped up my account of this, this morning, and i think that is why he is important even though he may not always be right, and even though he may not always be popular, he will be looking at the echo and alexa platform of artificial
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intelligence, he has for the first time a big software platform, and obviously, the retail store is a retail platform for the third-party sellers and that, and all of the tablets they did really did not have many platforms, but the echo already has like 1,000 partners and he's in the platform business as much as google and apple and facebook. >> well shg, your column is a g reflection of the interview, because we knew what we were thinking as the chat was taking place, and now we know what you were thinking. thank you, walt mossberg. >> thank you sh, carl. >> walt mossberg. kayla. >> over to the cme with rick san el telly. >> all right. tina and the fed, and that is not a beach party movie meets the "untouchables" or annette funicello meeting kevin costner.
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we have learned that there is no rate too low, and if you are looking at the bun des bdesbank the bond they are now below zero. at june they were at zero, and now the read is pie us in two or three basis points, and it is shocking, but we are anesthetized to it, and used to it, i think that it is crazy and once again, i have said it many time times, that smum toos people say it in the best way, and bill gross said that capitalism can't survive negative rates, and i tend to agree, but what this is all about is something that rahm emanuel said while he was at the white house in the dark days, and he said never let a crisis go to waste, and it is an opportunity to do what you think
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that you could not do before. and i don't think that the fed saw the current world, and if you go back a half a dozen years many of the policies would be in different if those in charge could have seen what we know now in negative rates, but the point is that there is a lot of squawking now about the negative rates, and there is a lot of squawking about the policy, and it is getting louder, and many years ago, maybe some of us were in the minority, but it is e definitely more of the majority, and my point is that if a recession hits before we get any type of cushion towards normalization, and meaning higher interest rates, there is no alternative. okay. the fed is going to have to decide on two things, and two things alone in my opinion, more qe and/or negative rates. period. okay. now the fact that i have not heard a lot of pondering a at the press conferences for janet yellen concentrating the speech on what should happen should a recession hit or the business
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cycle end before there is a cushion, and is there a little bit of the rahm in the fed that this crisis has to have to address it. even though they didn't raise when they had the opportunity, my question posing to you in the fed is, will they be quick to lower the rates should a recession hit? think about that. kayla, you have a good beat today, and the sunny skies of san francisco. back to you. >> nice and sunny, rick, but i will take it nonetheless, because it is a gorgeous city. rick san ttelli of chicago. coming up, the man behind your netflix queue, and we will talk to the man behind the recommendations tab on your account. that is coming up next. don't go away. of control. profits... and we pay the price. gouging. block action in the legislature. california. prescription drugs. of the drug companies... relief act.
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on "halftime report" energy stocks to a new high and what does that mean for your portfolio, and also, david maris and why the worst is not over for valeant. and volatility we will speak to the ceo of virtu, and it is the biggest trading company in the world, and we will look forward to that coming up. carl, back to you. and the media landscape changing content, and now, l listen to jason blum who has changed the economics of fi filmmakin filmmaking. we are in the amazing time in terms of audience and how
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they are consuming movies and content and nobody knows where it goes, and the movies, are they going to be playing at home at the same time and some longer and shorter, and that is affecting the type of movies being made, and everybody is in a total panic about it, and in five years, the movie business is going to be much healthier than it is now, and better than it is now, because it is going to be less uncertainty around it, but right now, yes, there's a huge audience for movies, but no one knows where we will capture them. >> and so how are consuming content and binging have to do next with what sites to re recommend after a episode or series or even a song, and joining us is the man who led the algorithm index, and he is joining us today from mountain view. thanks for joining us, javier. >> thank you. >> and on the scale of things that are difficult to write, and
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how hard was this program a kindergarten you put it in layman's terms? >> yes, so, i don't know if people are going to remember this, but it all started with $1 million netflix space in 2006, and you can frame it as there was $1 million contest where thousands of people across the world for over three years, they actually work on the algorithm, and so it is a lot of manpower, and really smart researchers around the world that basically came up with what we could call the initial version of the netflix recommendation algorithm, and then it obviously evolved after that. >> and does it work like a pandora algorithm where the songs have a series of categories and it is a matching game or something entirely different? >> well, it is mostly different. i mean, one thing to keep in mind that, what people call the algorithm is actually a lot of different algorithms working together, and now, there is on any site like netflix or acora, there are dozens of alg orithms
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that interact between them, and so it does not work on the categories and how people would call labels on songs or movies. most of the algorithms are based on what the users do. it is a technical term for it which is called collaborate filtering, and so what basically other users do is to determining what you are going to be seeing and what you will get. >> and i recognize that these alg algorithms are built to work across a massive group of people, and broad ka ccategoried characteristic, but is there is a sense that some individuals are so eclectic that it stumps the algorithm, and it does not adhere to the assumptions? >> so again, most of the alg algorithms are based on finding people who are similar to you, and the reality is that even though we think of ourselves as being sort of the unique, and having unique tastes, there is always going to be a bunch of
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people obviously when you have like millions and millions and users like netflix or acora or youtube or other sites, but there is a class of people who have similar tastes as you, and it is about finding the right group of people that resembles your taste and recommending things that are likely to fall under those categories. >> xavier, this is kayla tausche in san francisco and i'm a netflix customer and i frequently use the recommendations tab, but i am curious if the netflix content is given higher priority than the third-party content that they acquire? >> well, that is a good question. i don't think that i can answer that since i am not at netflix anymore. what i can say is that this is a typical issue in the recommendations of systems across like any different p product, and there is some content that for some reason, it is going to be more valuable for whoever is recommending, and
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think about the amazon case. they might have different, and a ton of different products that you might be interested on, but some of them, they might have a higher margin or the lower margin, and that is something that is really up to the designer of the business to basically decide like given the same probability that a user is going to like producta and b, and should we push for more product be, because of whatever reason. i mean, usually we like to have as much transparency as possible in the algorithms and not promote one thing or another, and basically favor the user, but i mean, it depends on the business case, and what each of this use cases are interested on. >> and although, ki imagine that a producer or actor meeting you at a cocktail party and asking if they can get a little higher placement on the stack. >> sure. >> and xavier, it is fascinating part of our lives. thank you so much for joining
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us. >> and you can find binge on hulu, apple tv or of course, when we come back, indian modi front of congress, and he has made a couple of head looinline we will get them to you after the break. but now is a good time to get the ball rolling. keep in mind, medicare only covers about eighty percent of part b medical costs. the rest is up to you. that's where aarp medicare supplement insurance plans insured by unitedhealthcare insurance company come in. like all standardized medicare supplement insurance plans, they could help pay some of what medicare doesn't, saving you in out-of-pocket medical costs. you've learned that taking informed steps along the way really makes a difference later.
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the prime minister modi speaking before the joint congress this morning. and seema mody with more. >> this the guy nknows how to work a crowd. an impassioned speech by the prime minister modi emphasizing the similarities, and we know that the two nations are identical in climate change, and addressing fossil fuels, but he also emphasizes the freedom of speech, and religious are equ equality, and talked about strengthening trade with the united states, and how it is already increasing to $10 billion that he is seeing further opportunity for the two countries to work together, and mentioning that, hey, at 7.6% growth there is mutual prosperity in the cards for united states and india, and he
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also recognized the success of indian americans scientists and doctors and engineers, and also a special shout out to the spelling beecham pi yons which i enj enjoyed as well. thank you. >> and seema, thank you for t t that. see ma moody there on capitol hill. >> and so we will see where that takes us this afternoon. over to scott wapner and the half. ♪ all right. carl, thank you so much. welcome to "halftime report." i'm scott wapner, and the big trade is power surge and what the move in oil means for your money, as stocks are marching to new highs. joe terranova and josh brown, and jon and pete najarian joining us. and with the stocks going higher lifted by another jump in crude, and energy is the biggest performing sector year today, and why we are here, doc, because we are calling it a power surge because over the last monti


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